If you sell stuff online especially digital product(s) then chances are that at some point down the path you will face some fraudulent customers who will try to rip you off. I sell many products online (some from my Tips and Tricks site and some from my other web sites). I have seen many of these tricks that the fraudulent customers use to take unfair advantage from the seller.
You probably already know that I have a few WordPress Plugins (e.g. Simple WordPress Shopping Cart, WP eStore, Another one in development) that help you sell online from your WordPress blog so a lot of my readers have WordPress powered site and sell products online. Going forward I am going to try to write more posts on various fraudulent tricks that customers tried on me and how I handled it. Hopefully these posts will help improve your online selling experience as a shop admin. In this post I have covered some aspects of the refund trick that many customers use.
The Good Old Refund Trick
I am pretty sure that most of you who are selling online have a system that makes sure the customer only gets the product after they have made a payment and the money is in your account but do you have any guard against fraudulent customers asking for unfair refunds?
There will be times when the refund claim is valid but sometimes it won’t be. You need to be prepared for this kind of events so the customer doesn’t get you by surprise and take advantage of you.
You might think “why would the customer do that?”, well I don’t know why but there are some people who use this technique to get the digital product for free.
Basically, they purchase your product legally so they can download it then they ask for a refund showing one of the following similar causes:
- Couldn’t Download the Product.
- No time to setup or explore the product (this is a weird one)
- The product does not match the description of the product.
- There was some functionality that the customer was looking for and is not in the product (why didn’t you ask before the purchase?).
Once you receive a refund request with the similar causes explained above look for one of the following types of customer behaviors to identify potential fraudulent customers who are just trying to rip you off:
- Asks for a refund within a short time of making a purchase (they already had the refund trick planned out)
- Unwillingness to cooperate with you to address any issue with the product (it’s like… give me my refund I don’t want to hear anything else)
- Won’t take the download even if you email them later. (they already got the download now they want the money back)
- Will send you rude emails with complains about the product (trying to make you feel bad)
- Open a PayPal dispute (if sold through PayPal) to scare you off.
So how do you protect yourself from these types of fraudulent refund activities? Well, I don’t know of any potion that will remedy this for good but I will share what I know and do to protect myself and hopefully it will give you some pointers.
Safe Selling Tips
It will help you protect yourself from fraudsters if you keep the following simple points in mind when selling online:
- Give detailed description of the product.
- Provide clear images, preview, live demo if possible.
- Tell them upfront how they are going to get the product.
- Let them ask you questions and respond to their inquiries so they can get a clear picture of the product.
- State your “Refund Policy” (if any) in the “Terms and Conditions”.
- Make sure the customer has to agree to the “Terms and Conditions” before they can make a purchase.
Refund Trick Case Study
Time for a real life example 🙂 I didn’t mention the name or email address of the person involved but that shouldn’t make any difference.
A few days ago I got a forum post saying there is an issue with the WP Affiliate Platform plugin that he purchased. It turned out that his server was using an old version of PHP so I gave him a fix for it and thought everything was good. Soon after that I received an email from PayPal for a “Dispute” notification on that purchase! The reason used was that the product was “Significantly Not as Described”!
At this point I was a little speechless cause I have live demo and screenshots showing exactly how the affiliate plugin looks like! Also, all the documentation for the product is accessible to everyone which allows the visitors to see exactly how things are done with the product before they make a purchase. So I asked him how the plugin is different than it is described and also pointed out the “Terms & Conditions” that he agreed to when making the purchase. Then I got the following email back from him:
Now, I was even more confused… how can you loose significant income and credibility from a system that you haven’t even setup? This guy was starting to sound more like one of those types I stated above so I took it to PayPal and stated my case. PayPal ruled it in favor of me for obvious reasons. I probably wouldn’t have taken it to PayPal and gave him a refund if his reasoning was appropriate. Anyway, that was not the end of it… soon after he found out that PayPal ruled it in favor of me he sent me the following email:
I started laughing because at this point his intentions were becoming clear to me. Why would you try to bribe with writing a blog post if you are correct on your points?
Anyway, my advice to you is that make sure you have preventative measures in place and be prepared to fight for situations like this. Oh! And don’t forget to subscribe to my blog to receive the latest posts 🙂